Company Illustrates Use of Carbon Capture Project

November 7, 2019

Honorable David Kautter
Assistant Secretary (Tax Policy)
Department of the Treasury
1500 Pennsylvania Ave., N.W.
Washington, D.C. 20220

David Selig, Esq.
Office of Associate Chief Counsel
(Passthroughs and Special Industries)
Internal Revenue Service
CC:PA:LPD:PR (Notice 2019-32)
P.O. Box 7604
Ben Franklin Station
Washington, D.C. 20044

Re: Section 45Q Carbon Sequestration Credit — Supplemental Comments of Tate Lyle, Plc; Notice 2019-32 Request for Comments on Credit for Carbon Oxide Sequestration, I.R.B. No. 2019-21 (May 20, 2019)

Dear Assistant Secretary Kautter:

Tate & Lyle, Plc is pleased to submit these supplemental comments to the Internal Revenue Service (“IRS”) and Department of Treasury (“Treasury”) illustrating a Section 45Q carbon oxide utilization project at one of Tate & Lyle's agricultural processing facilities. Tate & Lyle initially submitted public comments on implementation of Congress's enhancements to the Section 45Q tax credit program on July 2, 2019.¹

Supplemental Comments on 45Q Tax Credit Implementation

As stated in our public comments, the agricultural processing sector has significant capacity to capture, store and utilize carbon dioxide from fermentation and other processes, and we welcome clear tax guidance from IRS and Treasury to incentivize further economic investment in carbon capture utilization and storage (“CCUS”) projects. In our July 2, 2019 comments, we describe one such investment at our Loudon, Tennessee corn ethanol plant, where CO2 that would otherwise be emitted to the atmosphere is captured and sold to co-located third-party refrigerant facilities that produce dry ice and liquified CO2 for commercial markets. Through this CCUS project, Tate & Lyle captures and productively utilizes circa 80% of its CO2 emissions and displaces mined (fossil) CO2 that would otherwise be used for these commercial products.

The CCUS process at the Loudon plant is illustrated in the attached flowchart (Attachment A).² As depicted in the first step of the chart, the manufacturing facility produces CO2 as a byproduct of the fermentation process. Tate & Lyle then captures the CO2 and removes impurities using specialized equipment including scrubbers, blowers, and related piping. The cleaned CO2 is then piped to nearby third-party facilities that compress the captured CO2 with refrigeration equipment to produce dry ice and liquified CO2 products that are sold in commercial markets. Gas flow meters are located on the pipes between the fermentation plant and the refrigeration facilities, allowing Tate & Lyle to monitor and report on the amount of CO2 produced by the plant and utilized by the third-party facilities. Tate & Lyle's captured CO2 is utilized by the refrigeration facilities to displace fossil CO2 (that is, carbon dioxide mined from geological formations and newly introduced to the atmosphere) resulting environmental benefits from fewer lifecycle greenhouse gas emissions. Accordingly, the Loudon CCUS project is exactly the type of CO2 capture project that Congress intended to incentivize with its enhancements to the section 45Q tax credit program.

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Tate & Lyle greatly appreciates this opportunity to supplement its comments on these important aspects of the 45Q program. If you have any questions or would like to discuss our CO2 displacement project, please contact me at Lawrence.Pociask@tateandlyle.com.

Respectfully submitted,

Lawrence Pociask
Vice President
Tate & Lyle, Plc
Hoffman Estates, IL